John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
You open the front door and are delighted to find a package containing the lamp you ordered yesterday. But when you pick up the carton, you hear the telltale clink of broken glass. Before you can pick up the phone to complain, however, you look up and see the express carrier's driver sprinting across your lawn bearing a carton with a replacement lamp—this one, happily, fully intact.
Sounds too good to be true? That scenario may be closer than you think ... and it will likely be made possible by the magic of RFID. Among other projects, express delivery companies are busy running tests to see whether RFID tags can reliably detect damage to packages and automatically prompt the shipper to send a replacement. "There are just so many possibilities," says Bob Berg, an RFID specialist at DHL. "RFID could be used to track if a package was dropped from beyond its drop specifications, or [if it] got wet or was tipped on its side." With early notification of the mishap, he says, the carrier could ship a replacement while the first one was still in transit.
It's hard to imagine an industry where RFID holds out more potential than the overnight package delivery business. True, the major players already possess advanced systems to track packages, but it's clear that they see RFID playing a role some day. DHL, for instance, has pledged that it will tag every package it delivers by 2015. UPS, meanwhile, has invested in three RFID-related startup companies, including Impinj, a supplier of RFID chips and tags. FedEx, too, acknowledges that RFID is the way of the future. "RFID is going to play an important role in the future of shipment and package movement," says David Zanca, FedEx's senior vice president of information technology.
Beyond detecting damage to packages, RFID also offers great potential for tracking. Customers who ship high-value goods are already asking for tracking solutions that make use of active RFID tags—tags with their own power source.
Eventually, DHL hopes to use RFID to offer customers tracking data so detailed and accurate that they can dispense with costly inventory stockpiles."We're hoping that the increased visibility we'll have into shipments, and the information we'll be able to transfer to the customer in real time, will result in the customers' having a better opportunity to manage their freight while it's still in the DHL pipeline," says Berg. "By eliminating some of their inventory warehousing, RFID could help to fine-tune [clients' just-in-time operations]."
Recommended for internal use, too
In the end, however, RFID's greatest promise may lie not in the "extras" parcel carriers can offer their customers, but in its ability to streamline the carriers' internal operations. Carriers could use routing data collected via RFID, for example, to identify mis-sorts and get misdirected items back on track for on-time delivery.
Then there's RFID's well-documented ability to reduce paperwork and eliminate time-consuming data collection tasks. "The process of manually scanning bar codes at certain points could be replaced with tag readers,
so as you load a container, packages pass through a pOréal and you get a read on the tag," says Zanca. That's much faster than having a worker scan the bar code and manually place the package in the container.
It's not just faster; it's cheaper. "Having a person pulling a trigger on a bar-code scanner represents a considerable cost to us," notes DHL's Berg. "Internally, where we can replace manual bar-code scanning with RFID and automated scanning would be a big plus for us."
UPS already has a pilot under way to test the feasibility of using RFID tags to track containers moving within its processing centers. As part of the test, the carrier has affixed passive RFID tags—tags with no batteries or power source of their own—on reusable tote boxes used to convey small packages and irregularly shaped packages within its own facilities. The pilot's first phase was conducted at the carrier's state-of-the-art automation testing facility in Atlanta, which replicates most automation systems used in UPS's global operations. The pilot's second phase is currently under way at Worldport, the UPS international air hub located in Louisville, Ky., where 1,000 tote boxes have been tagged with RFID labels.
Active interest
Though UPS's pilot is a notable exception, most RFID applications in the parcel delivery world have involved active tags. "We've used active tags quite successfully for a number of years," says FedEx's Zanca. "We've deployed them in our operations in a number of places—on our trailers as they come into facilities with gate readers, and we've tagged containers and various other assets."
But as reliable and capable as they may be, those active tags have yet to transform the industry. What will finally ignite the RFID revolution, analysts say, will be their less capable brethren, the passive tags. The explanation lies in the tags' cost. Active tags are too expensive to use for tracking the millions of shipments the big parcel carriers move each day. But passive tags, which are much cheaper to manufacture, may someday make tagging feasible.
Problem is, that technology is not yet ready for prime time—at least where the overnight delivery business is concerned. "We think ... passive tag technology has a very important place in the future," says Zanca, "but as of today, all of our field work has shown there are still read rate problems and reliability issues. ...We continue to work with them in a lab environment in the field, but they are not reliable enough for us to run a sorting operation or to provide tracking information to our customers from those tags."
And even if the reliability issue could be resolved, the tags' costs are likely to inhibit their widespread adoption in the near term. "The 10-cent tag will not take RFID into mainstream supply chain applications," says UPS representative Donna Barrett. "Technology breakthroughs are required before tag costs drop to [the] point where RFID replaces bar codes." Even if tag prices were to drop precipitously, she adds, companies would still have to invest in tag readers and related equipment.
Still, most observers believe it's only a matter of time before the express industry goes over to RFID. DHL has already gone public with its plans to tag all of its shipments within the decade. And though he doesn't specify a timeline, it's clear FedEx's Zanca is thinking along the same lines. "It's safe to say this technology will evolve to the point where it will have a place on all of our shipments and packages and be an important part of our operations," he says. And UPS? Right now, the carrier says it has no immediate plans to tag individual packages. But that will undoubtedly change if one of its competitors takes the plunge. In the race to move packages smarter, faster and cheaper, no one wants to risk getting a slow start out of the gate.
RFID goes postal
Consumers beware: Postal services around the world have big plans to read your mail. But postal patrons need not worry about local letter carriers' scanning their private correspondence. The readers will be RFID pOréals that scan individual pieces of mail to expedite sorting and dispatching.
Though the U.S. Postal Service has been something of a laggard in this regard—it's just now looking at ways to use RFID—other countries are swiftly moving forward with the technology. Swedish Post, for example, is using RFID-enabled postal sorting equipment, RFID cards that monitor drivers' access to postal vehicles, and RFID systems to detect package tampering.
Korea is looking at using RFID to automate the entire process of mail delivery, from the time a package is accepted through classification and dispatching. And postal officials in India and Taiwan have already met with Microsoft to discuss using a new postal-related RFID package that Microsoft unveiled at the Taipei 2005—18th Asian International Stamp Exhibition last fall.
Microsoft's sudden interest in postal systems is easily explained by the market's growth projections. Analysts at London-based Research and Markets project that the global market for postal-related RFID systems (including tags) will be worth at least $3 billion by 2016—a number that could go much higher if item-level tagging gains acceptance earlier than expected. The study predicts over one trillion postal items will be tagged yearly, making the sector second only to the retail supply chain when it comes to the worldwide market for RFID.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.